National Institute of Bank Management, Pune.

Digital Payments 2020

Presented by Group No. 05

Anurag Agrawal 08
Gaurav Jain 19
Goldy Bajaj 21
Jasjeet Singh 24
Parul Mohan 36
Praditi Bhatt 37
Objective

To provide
comprehensive
overview of the
current
transformation
underway in digital
payments and its
impact on the overall
payment landscape
in India
 Qualitative and Quantitative research executed
by Nielsen including
14 group discussions
26 in-depth interviews for users and merchants in 3
cities (Mumbai, Lucknow, Delhi)
Formulation of Quantitative Survey based on the
Inputs from GD & interview
The survey garnered 3,500 respondents (digital
consumers: 1,516; remittance users: 917; merchants:
917), across nine geographiesDelhi, Mumbai,
Bangalore, Ludhiana, Lucknow, Indore, Surat,
Vishakapatnam and Coimbatore
MAJOR FINDINGS
 Global payments going Digital
Four seismic shifts in the global landscape:
1) The ongoing digital/technology revolution
2) Entry of non traditional players
(exhibit1.1)
3) More demanding customer expectations
4) Enabling regulations.
Rapid evolution of digital consumer
payments

Digital payments nearly 20% of retail transaction value by 2020

 India payments on a similar
disruption trajectory
Four mega trends transforming India
1) India going digital(exhibit 2.1)- mobile trajectory; the
internet network; banking on digital growth(exhibit2.2)
2) Favourable regulatory environment- KYC relaxation
for small transactions; exemption from 2 factor
authentication; Aadhar making KYC easier; UPI;
Bharat bill payment system
3) Emerging of NextGen payment service
providers(exhibit2.3)- bank-led; telco-led; prepaid
wallets; payment banks
4) Enhanced customer experience- superior and
seamless customer experience; attracting customers
with offers and discounts
Rise in adoption of digital payments
Indian Consumers raring to run up
the adoption curve
Key insights from the consumer research
1. 81% of users of a digital payment
Instrument prefer it to any other non cash
payment method

2. Convenience is as important as offers in

driving digital adoption. (exhibit 3.1)
3) Prepaid mobile recharge and bill payments
remain the most popular USE CASE
4) Point of sale to form the largest use case for
digital payments in future
5) High frequency use cases driving usage of
digital payments
6) habit to use cash, complexity and perceived lack of
value proposition key barriers to adoption
7.Security, identity, theft and fraud are not big
barriers in India
8. 75% of merchants believe that using digital
payments would accelerate future sales.
9. Key barriers for merchant trials
10. Building a transaction ecosystem for merchants is
critical
 FUTURE OF DIGITAL PAYMENTS IN INDIA

TECHNOLOGY WILL MAKE DIGITAL PAYMENTS

SIMPLER
1. Contactless payments
2. Reduced dependence on mobile internet
3. Internet of things
4. Block chain
5. Voice based payments
6. Biometric/ iris authentication through mobile
 MERCHANT ACCEPTANCE NETWORK TO GROW 10X BY
2020
CURRENTLY: One of the most underpenetrated section in the world Expected to
grow ten times by 2020
 PAYMENTS WILL DRIVE CONSUMPTION
Payment Service Providers will get access to customer transaction data
Customers will be offered digitized valuables.

CONSOLIDATION WILL DRIVE LIQUIDITY

Customers would prefer to have fewer apps/ wallets with multiple uses.
Niche/ single use case solutions/ apps will be acquired.
Universal and ubiquitous solutions will increase.

MODIFIED UNIFIED PAYMENTS INTERFACE

Peer to peer, person to merchant, business to business payments will be on
cards.
Only UPI ID will suffice to carry out all the transactions.
Current Scenario: UPI is in early stages and requires a virtual ID.
 DIGITAL IDENTITY WILL ACCELERATE CUSTOMER
ACQUISITION
Usage of Aadhar for online identification and confirmation of KYC data.
Customers will be acquired digitally.

CASH TO NON CASH RATIO WILL INVERT

Proportion of non cash will
overtake cash transactions.
Alternate digital payments
instruments will drive the
growth in non cash
payments.
 DIGITISATION OF PAYMENTS IS A LARGE
OPPORTUNITY

Large size of price in India

Merchant payments will constitute 40% of
digital payments
B2B payments will gain traction
P2P payments to double by 2020
 Variety of Payments use cases
 USD 500 billion will flow through Digital
Payments in India by 2020
 Projected P2M sub segments share in 2020
 Preferred payment methods for remittance users
 The Winning Agenda
Addressing true customer needs
Building solutions that are easy to use as cash
Building a ubiquitous network
More association or Partnerships
Reducing entry barriers for customers
Building additional revenue streams by
customer data
Using next generation technologies
Making the model sustainable
 Looking beyond payments to consumption
 Developing ecosystems to envelop customer needs
 CALL TO ACTION FOR BANKS

Payments are critical for banks as they help

in :

Determining the primary bank for the

customers
Cross selling other products
Driving lower costs to serve
Accessing new to bank customers
 Role of regulators and industry bodies

Building awareness about cost of cash

Incentivizing usage of non cash instruments
Making Policy for electronic transactions with
Govt. agencies
Simplifying KYC requirements
Making digital transactions simpler
Investing in building acceptance networks
Setting up common infrastructure
Providing framework for grievance redressal
 Conclusion
Opportunity
The report predicts that size of
digital payments industry in India will
be $500 billion (contributing 15% to
Indias GDP) by 2020.
Non-cash transactions will exceed
cash transactions by 2023.
Challenges
1 of 2 non-users havent used digital
payments because they found the
product too complicated to
understand
61% of non-user merchants find it
complex to use
Universality of acceptance of digital
payment methods & Speed of
transactions during peak hours have
emerged as other inhibitor
THANK YOU